Police complaints meant Uber could not get an easy ride

CROYDON COMMENTARY: London taxis have been highly regulated, to protect passengers and other road-users, for centuries. Then Uber came along. CHRISTIAN WOLMAR says that concerns from the Met left TfL with little choice

The non-renewal of Uber’s licence is the first step in what is bound to be a long legal battle and has come as something of a surprise. Transport for London has long been accused of being supine in relation to Uber, ignoring its numerous contraventions of the regulations and complaining that its hands were tied.

Uber sloppiness and its light-touch oversight of its drivers has now proved too much even for TfL’s relaxed regulators. The most publicised Uber failing was its reluctance to report criminal offences by its drivers, something which attracted criticism from the Metropolitan Police. The company seemed to be ready to report minor misdemeanours while ignoring assaults on female passengers.

However, it was Uber’s attempt to dodge TfL’s attempts to discover whether the company was keeping within the law which actually got its goat. It used a software programme called Greyball to block users, who had been identified as mystery shoppers working for TfL, from obtaining a ride.

The revelation of this practice, in March, incensed TfL as it demonstrated that Uber is a company that is out of control and unwilling to submit itself to normal regulatory practices.

It is, too, perhaps no coincidence that this licence decision has occurred just after the departure of Leon Daniels from his post as managing director of surface transport. Daniels, who left his post this month, has long been criticised by the unions for his failure to take action against Uber.

The decision not to renew the licence has not, however, been taken in response to the key problem created by Uber, which is to have flooded the streets with a supposed 40,000 drivers who are exempt from the congestion charge. This has led to a slowdown in speeds on the roads of central London and much loss of revenue from the capital’s highly regulated black cab trade.

Nor has it addressed the issue of Uber’s business model, which is fundamentally flawed.

Uber currently subsidises every ride, charging around 20-30 per cent less than a break even fare, in order to drive competitors out of business.

These are the long-term problems with Uber which this decision, taken for administrative reasons, fails to address.

The more fundamental questions around the introduction of Uber therefore remain unanswered, such as how to control this behemoth which seems to have endless funding from Goldman Sachs, while flooding London’s streets with additional traffic and wrecking its cherished cab trade.

Watch, meanwhile, for a long drawn out legal case and a war of words.

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3 Responses to Police complaints meant Uber could not get an easy ride

  1. Two problems with Uber are according to its critics is that it avoids paying VAT on fares and that the 20-25 commission it charges on each fare is repatriated back to the USA. One could argue that a model where large numbers of Uber drivers come into London and then wait around to take customers out of town is not good for the driver or the environment. This dead mileage is a flaw in its business model

    • Nick Davies says:

      Large numbers of black cabs come in to London and wait around for rides. That will happen whatever the system until such time as cabbies can afford to live in central London.

  2. Couple of technical points about the article that seem to have escaped the author: firstly Leon Daniels hasn’t left TfL, it was announced he is standing down, but he will still be around for a few months (he had previously planned to retire a few years ago but delayed it). Secondly, nobody at TfL, or anywhere else for that matter, has discretionary powers to take action against Uber, no matter what Unions or Black Cab interests may claim. Action against Uber has to be taken within the regulatory framework, which is why it has come now with the license [sic] renewal.

    Now technical points aside, Uber obviously has issues that it needs to tackle, and I suspect they will be forced to tackle them in order to get the license [sic] back.

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